The German auto industry was late to the hybrid game. While Toyota slowly pushed forward with gasoline hybrids, Germany’s preferred fuel-economy solution—the diesel—failed to make inroads.

Now it‘s time to catch up. Every German carmaker is pushing hybrid technology, often with execution surpassing that of the Japanese competition, and BMW is looking at a system for small cars.

As the next-generation 3-series, internally called F30, nears production, BMW is working hard to bring a hybrid version to market. This prototype captured by our spy photographer betrays the F30’s conservative lines and is plastered with some characteristic warning stickers that indicate a hybrid powertrain is under its skin.

Curiously, the prototype is equipped with the dual exhaust pipes typically reserved for BMW’s turbocharged six-cylinder models. As the Bavarians are pushing for downsized, turbocharged engines—four-cylinders in the 3-series instead of sixes—we find it pretty unlikely that a 3-series hybrid powertrain would actually be based on an inherently less efficient six than on a turbocharged four. But even with a four, such a hybrid could make close to 300 hp, with less-powerful versions also a possibility.

One thing is certain: The 3-series hybrid will not only be fuel-efficient, it will be fast. Thanks to Lexus for paving the way for small luxury hybrid sedans, but the HS250h will be left in the dust by this upcoming Bimmer.